EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608554
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Carr Australia Pty Ltd applied for a TCO in respect of certain mobile plastic welders on 16 May 2006.
Instrument
TCO No 0608554 was made on 04 August 2006. It declares that those certain mobile plastic welders are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0608554 is taken to have come into force on 16 May 2006.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0608554, enacted under the Customs Act 1901, was introduced to provide tariff concessions on certain mobile plastic welders, reducing the customs duty on these goods from the general rate of 5% to free. This instrument was created in response to an application by Carr Australia Pty Ltd on 16 May 2006, and the concession became effective on the same date. The Chief Executive Officer of Customs determined that the application met the core criteria, specifically that no substitutable goods were produced in Australia at the time of the application, leading to the issuance of the tariff concession on 4 August 2006. The legislation aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date of the tariff concession, without imposing any new liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0608554 under the Customs Act 1901 applies to the specific category of mobile plastic welders for which Carr Australia Pty Ltd applied on 16 May 2006. The Act facilitates the application of a lower rate of customs duty for goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO). The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, ensuring that the concession does not undermine local production. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia. The instrument does not disadvantage or impose liabilities on any person other than the Commonwealth, and it provides benefits to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, which is 16 May 2006. Any exclusions or restrictions on the application of the TCO are limited to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The scope of the Act may be further extended or restricted through subordinate instruments, although this specific TCO does not impose any additional liabilities or disadvantages.
Key Provisions
The Customs Act 1901, specifically within Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (section 269F). Section 269C specifies that for an application to meet the core criteria, there must be no substitutable goods produced in Australia on the day the application is lodged, with the definition of "substitutable goods" provided in section 269D. If the CEO is satisfied that the application meets these criteria, they must issue a written order that specifies the goods and the corresponding tariff item from Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
Under this legislation, the CEO is obligated to consider applications for TCOs and ensure that they meet the stipulated core criteria before making a decision. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). This process ensures transparency and allows for public consultation on tariff concession applications.
Failure to comply with the requirements set out in the Customs Act 1901 can result in various civil or criminal consequences. For instance, if a person knowingly makes a false statement or provides false or misleading information in an application for a TCO, they may face criminal penalties. Under section 271D of the Customs Act 1901, such an offence is punishable by a fine of up to 10,000 penalty units or imprisonment for up to five years, or both, for a body corporate. Additionally, any person who contravenes a TCO may face penalties as if they had contravened the corresponding provisions of the Customs Act 1901, potentially leading to fines or other sanctions.
The Tariff Concession Instrument No. 0608554, made on 4 August 2006, specifically addresses mobile plastic welders by applying item 50 of Schedule 4 to the Customs Tariff Act 1995. This means that the general rate of duty, which is 5%, is reduced to free for these goods, provided the core criteria are met. The TCO is effective from 16 May 2006, the date the application was lodged, and it does not impose any liabilities on any person, ensuring that the rights of importers are positively affected. Importers can apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.